Online Ad Industry Exchange Activity Heats Up

While online exchanges spring up for everything from chemicals, to steel, to plastics, the business-to-business action in the advertising industry is intensifying, as established leaders expand their ambitions and new players introduce their own efforts to revolutionize media buying and selling.

“The marketplace has gone wild in the last six months,” said Alan Masarek, chairman and chief executive officer of, an online marketplace for online, outdoor, print, radio, and television ads, “and the pace of growth is accelerating.”

The best-known player in the business is, which made its name selling remnant online avails and has recently branched out into out-of-home opportunities. The company last week brought aboard executives from the world of broadcasting, a precursor to their planned move into television, radio, and print.

“We believe we’re going to be first to move forward in all categories,” said Derek Mattsson, senior vice president of marketing at

Other competitors here include, which has been operating since July 1999, and, which recently re-launched its online advertising service after receiving an $8.25 million investment. This week saw the introduction of MediaPost‘s, which acts as a virtual introduction service between online publishers and advertisers. Meanwhile, there are and, which focus on TV and radio. And finally, there’s, which does newspaper and magazine avails.

While these exchanges have a reputation for being bargain-basement sites that drive down the prices of media, many among the current crop of executives are looking to change that view. Remnant media still accounts for a significant amount of what’s sold on these sites, but the number and quality of avails does seem to be steadily increasing.

The increase in the number of folks registered on these exchanges shows a pattern of dynamic growth. says it has more than 2,000 buyers and tens of thousands of sellers. says it has grown to 10,000 registered users, as compared to only 4,000 a year ago. The number of sellers of online media on the site has grown to 350 this year, up from 125 last year. says it has 6,500 registered media buyers now. It launched in June of 1999 with 30 media companies selling $1 million in inventory, and now has more than 300 sellers, with $30 million in inventory., although it just launched, says its phones are ringing off the hook with companies eager to be listed as sellers.

The proliferation of players and the explosive growth is a testament to their increasingly importance, as media opportunities multiply with the growth of the Internet.

“The fragmentation that exists, it’s so overwhelming,” said Chad Roffers, vice president of online advertising at “Media buyers have only a certain amount of bandwidth to deal with people in person.”

Masarek of agrees, saying, “Media transacting is greatly strained right now.”

Another reason for the ascendance of online marketplaces is the fact that media buyers are expected to turn on a dime when making changes in a campaign, and online publishers often need to make last-minute sells when traffic increases. When you’re expected to operate on Internet time, it seems, you’re more likely to turn to the Internet.

One factor that will determine how big these players grow is their various business models. aims to be a one-stop-shop for online remnant advertising, where media buyers can come, buy space, upload creative, see reports, and make changes in campaigns. incorporates a wider range of media, and it also has developed for a negotiating process that the company hopes mirrors the real world, where pricing is different for different customers.

“Until you see models that address these points,” said’s Mazarek, “you’re going to get slow adoption.”, as the name implies, mostly follows a bidding model. But it also allows media buyers to submit their parameters, and have publishers come to them with avails that fit their needs.

“That’s what totally makes the most sense for an agency,” said Brandon Rea, national media director for Beyond Interactive. “I don’t necessarily want to be bidding and waiting to see if we make it or not.” simply posts the public rates for different online advertising opportunities, and serves as a middleman during a negotiating process, taking five percent of the purchase price as its fee.

“It’s evolving,” said Adam Herman, marketing director at MediaPost. “Our next idea is to launch into something else, maybe radio, print, magazines.”

As much as all of the new players are benefiting from the increased attention, it’s clear that these exchanges won’t be the only place media buyers and sellers go to transact business.

“We have traditionally used direct sales because there are a finite number of customers,” said Lyn Chitow Oakes, executive vice president and general manager of Engage Media, “and these services just offer another channel.”

The big agencies, especially, have already established relationships and rates, and have little need to go elsewhere. It’s the smaller advertisers, like marketing managers at individual Web sites, that will probably find the most utility in these online exchanges.

“It speeds up the process of doing things, and puts the little guys on par with the bigger guys,” said immediabuy’s Herman. “I think something like immediabuy and others are saying, ‘you can compete, you can be taken seriously.'”

Obviously, we’re just in the early stages of what online marketplaces can offer the advertising industry. Some already allow for the digital transfer of creative, and this will likely become a must-have feature as higher bandwidth becomes more commonplace. We’ll probably see consolidation among the players, or possibly greater specialization as companies try to find their niche. The only thing that’s sure is that this sector is one to watch in the coming months.

Related reading